Yes, thank you. First, I would like to welcome you to the Össur investor conference call, where we will cover the results for the first quarter of 2020. As already mentioned, my name is Jón Sigurðsson. I'm the President and CEO. And with me here today is Sveinn Sölvason, our CFO. We will begin by going through the highlights for the quarter, followed by a status on the impact of the COVID-19 pandemic and then go through the quarterly results. A question-and-answer session will then follow.

Financial performance in the first quarter of 2020 was impacted by COVID-19 pandemic, both in terms of sales and profitability. I will, on the next slide, go through the highlights of the import -- impact that COVID-19 has on the operation of Össur.

Sales in the first quarter of 2020 amounted to $154 million, corresponding to a 2% decline in local currency and a decline by 4% organic. Month-to-date sales for April are down by approximately 45% as the markets where -- we generate most of our sales are now impacted by the COVID-19 pandemic. We are, however, already seeing gradual signs of recovery in key European markets and sales in China, where, in April, back at levels comparable with 2019.

EBITDA amounted to $22 million or 14% of sales. Lower EBITDA than in the comparable quarter is mainly due to lower sales. Due to the uncertainty caused by the COVID-19 pandemic, we withdrew our guidance on March 17 and temporarily suspended our share buyback program.

On April 7, we received an approval notice from FTC regarding the acquisition of College Park. Given these uncertain times, the parties have agreed to remain flexible on the closing date, with aim to conclude within 3 months.

Lastly, additional financing of $225 million were secured in March to strengthen Össur financial position through these uncertain times.

Now let's look at the high-level overview of how the pandemic has impacted our operations. Over the last couple of months, our primary focus has been on business continuity and safety of our employees and customers. Our manufacturing sites and warehouses across the world are largely operational, with employees working in shifts, and current demand is being met. We have taken extensive safety measures to ensure production and minimize the risk of contagion. Many of our office and sales employees are working from home, while sales, marketing and educational activities are being refocused to digital and online.

Our IT infrastructure continues to work well, and business continuity plans have been implemented in all areas of the business. Össur's strategy and strategic initiatives remain unchanged, and we will continue to invest as necessary to support future growth. This includes investment in research and development and continued investment in sales and marketing infrastructure in the emerging markets.

The pandemic is having short-term negative impact on demand for prosthetic and bracing and support products. We do, however, highlight that the long-term prospect and underlying fundamental drivers of the prosthetic and bracing and support markets are not expected to change. The impact from COVID-19 is furthermore expected to lead to some pent-up demand.

Financial performance is negatively impacted. Sales growth in the first 2 months of the year was in line with earlier expectations, but sales began to be impacted in March. Sales month-to-date in April are further more significantly impacted as they are down by approximately 45% as some markets have strict lockdown measures in place.

We do already see signs of recovery in some markets, but it remains uncertain when markets will be back at normal operational levels. And we are, therefore, not able to provide any update on financial guidance.

Due to the temporary decrease in sales, Össur has taken several actions to reduce cost in short term. These actions include furloughing employees and participating in government support programs where applicable.

In addition, a voluntary temporary decrease in salaries for top management has been implemented and strict control on all variable cost items. These cost reductions are not reflected in the first quarter financials, but the currently identified OpEx reductions will amount to about $8 million to $10 million in the second quarter.

Even so, we are well financed and confident that we are in a strong position to get through these uncertain times, we are -- where available cash at the end of the quarter amounted to about $300 million.

Finally, I would like to thank all our employees and customers for continued flexibility, positive team spirit and their effort in this challenging time. We have yet to discover the full impact on society and our businesses, but what we do know is that now is the time to act responsibly, decisively and collaboratively.

If we turn towards the quarter sales. The sales amounted to $154 million compared to $160 million in the comparable quarter last year. The sales impact due to the COVID-19 pandemic has been similar in both prosthetics and bracing and support, where sales performance was in line with expectations in the first 2 months. The prosthetics segment declined by 4% organic. Sales of bionics accounted for 21% of prosthetic component sales, the same as in comparable quarter last year. Bracing and support declined by 7% organic, partly caused by discontinued product line in emerging markets. Reported sales declined by 4%.

If we briefly go over sales by geography. It varies significantly between countries how much the COVID-19 pandemic impacted sales in the first quarter. If we start with APAC, sales in China were impacted January through March, but other countries within the region were less impacted, such as Australia, where the impact has been very limited.

Looking at EMEA, sales impact also varies by country. While many countries in the regions were materially impacted by pandemic, relatively large Össur markets such as Sweden and Germany were in March impacted less than the market, such as Southern Europe or other countries where lockdown measures were put in place.

In Americas, both the United States and Canada were impacted in March, which are Össur's largest market in the region.

Thank you, Jón. As Jón already covered, organic sales declined by 5% and 2% in local currency. The gross profit margin was 62% here in quarter 1. The lower gross profit margin is mainly a result of lower sales and slightly lower productivity as a result of lower manufacturing volume in the month of March, mainly caused by the COVID-19 pandemic.

EBITDA amounted to $22 million or 14% of sales compared to $30 million or 19% of sales in the comparable quarter. And I'll review the EBITDA development on the next slide.

Also, as Jón already mentioned, cost reductions are not reflected in the first quarter financials, but we expect OpEx reductions to amount to $8 million to $10 million in the second quarter. The cost reductions are based on information we have today and are subject to change depending on changes in local government plans and how quickly we see sales growth resuming. It should also be noted that most of the cost reductions are temporary measures while sales are impacted by the COVID-19 pandemic.

The effective tax rate was 25% compared to 24% in the comparable quarter. Net profit was $7 million or 5% of sales compared to $14 million or 9% of sales last year.

Go to the next slide, please. A few comments on EBITDA. As previously mentioned, lower gross profit margin -- gross profit and gross profit margin, mainly as a result of the lower manufacturing volumes in March. Growth in sales and marketing expenses is mainly due to acquisitions as sales and marketing expenses would, let's say, if you adjust for acquisitions, be lower year-over-year due to less activity and lower variable payroll cost.

There's a slight decline in R&D cost due to some temporary project delays and less activity in connection with, again, COVID-19.

And finally, there's an increase in G&A, which is mainly driven by recent acquisitions and related investments there, too. As a result, EBITDA margin was 14% in quarter 1.

Currency movements impacted the EBITDA margin positively by about 40 basis points. And it should be noted that the ISK, which is the main reason for the positive FX impact, has depreciated further here in April.

Free cash flow was strong and amounted to $15 million compared to $4 million last year. The key items affecting the free cash flow between the years are, firstly, lower operating profit; then, on the working capital side, we have lower investment in inventory than in the comparable period; and a reversal of accounts receivables from quarter 4 and somewhat stable accounts payable. Paid cash taxes also, slightly higher. And CapEx is higher than in the comparable quarter due to, again, the efficiency initiatives and investments in a new CRM system.

Cash flow will be impacted as a result of the COVID-19 pandemic. Accounts receivables are expected to increase in the coming months due to unexpected delay in payment collections from some customers. It can also be expected that a temporary increase in bad debt will occur. Some reductions in accounts payable can be expected as vendor purchases have been reduced and inventory levels are expected to be largely stable as current production -- current product demand is being met.

CapEx is expected to decrease in the remainder of the year relative to recent quarters. Also, we secured additional financing of $225 million in March, including a $75 million loan from the European Investment Bank and $150 million incremental credit facility from Danske Bank and Nordea. The terms of the new financing were favorable and in line with existing credit facilities.

Net interest-bearing debt was $308 million at the end of the quarter, which corresponds to a 2.2x net interest-bearing debt to EBITDA. Cash, in addition to undrawn facilities at the end of the quarter, amounted to $304 million.

Yes. Thank you, Sveinn. As announced on March 17, we withdrew our financial guidance due to the uncertainty caused by the COVID-19 pandemic and due to the rapid day-to-day change in the regional markets across the world. We are still unable to assess the magnitude and length of the expected impact of COVID-19. We can, therefore, not yet provide an updated financial guidance for 2020. As soon as we can estimate the expected financial impact of the COVID-19 pandemic, an updated guidance for 2020 will be published.

I have a couple, at least. So can you first help us with what you estimate the impact of COVID-19 to have been in March? Now you say you've seen April sales be around 20 -- or sorry, 45% below normal here in April. What was the figure for March? That's my first question.

And then my second question is on the recovery that you are seeing, particularly in China, where you -- where I understand that you're saying that you're back to 2019 levels, should that be understood as you believe that the market there has normalized? Or are you still below where you'd like to be considering that, I believe, you were growing quite rapidly, maybe something to the tune of 10%, 20% prior to the COVID-19 pandemic? That's my first 2 questions.

Christian, I can take the first one. The sales decline in March was 15%, which means that the growth in January and February was just around flattish. And just a reminder, quarter 1 last year was a very strong sort of quarter organic growth-wise. So we expected quite moderate sales growth here in quarter 1.

Yes. And regarding the China question, the normalized growth there is about at level last year. It's up and down. And we -- it has not stable as yet, but it's -- we think it's going into a normal trading relatively fast. But it's -- yes, that's true. We had -- there's quite a bigger growth. We don't see growth yet there.

Okay, great. And then just a couple of additional questions, if I may. So can you just clarify, on the cost reduction of this $8 million to $10 million that you're talking about for Q2, is that versus the cost base in Q1? Or how should we think about that?

Yes. Christian, sorry, I'd like to add a very important point in China. And I don't want to spend too much time here, but the amputations in China are predominantly by trauma and caused by accidents, work-related accidents or traffic. And because of the lockdown there, there is quite a big difference in the amputations level in China while the restrictions were in place. So it's not a typical market. Okay. Sorry, yes, go ahead.

Okay. Great. And then my final question. Do you have any -- have you heard anything new around competitive bidding in the U.S. and whether that might be postponed -- the implementation might be postponed due to the COVID-19 pandemic?

My first question is about the 45% sales decline you saw in April. Could you break that down between the bracing and support and the prosthetics businesses?

And my second question would be that when you look at the net working capital, so the worsenings that you're expecting in the second quarter, would you expect those net working capital increases to remain for the second half of this year provided that we see a recovery in your markets during the second half of the year?

Okay. So let me take the 45% decrease. We -- it's a slightly bigger decrease in bracing and supports and prosthetics, but not material. There is a discontinued product in bracing and support in -- specifically in the emerging market that plays a big role in it. But it's pretty similar, but a little bit more in bracing and support.

On the working capital, Niels, I mean, we have -- it's our expectation that, let's say, payments from our customers will -- that DSOs will not be extended as we get into March and June. But for the month of April, we are still -- let's say, our DSOs are developing in line with what -- they're largely stable. So we haven't seen any deterioration to date in our, let's say, in our accounts receivable. So -- but it is still our expectation that it will, let's say, that DSOs will go up over the next couple of months. But that's -- but let's say, when it will sort of get back to normal levels, I think that would largely sort of be in line with how we see sales recovering, and it is our operating assumption that sales are -- sort of already started to gradually climb up to normal operating levels. So I'm afraid I can't give a very precise answer on that because it ties into what we -- how, let's say, things will materialize over the next, yes, couple of weeks and months.

Well, your guess is probably as good as -- in the long term, I think the consolidation will increase. But other than that, I don't know. It's -- but having said that, our customer seems to be quite robust, and we have not seen any particular delays yet in payments. So the business seem to be pretty sound as of now.

I mean now everything is on hold, Niels. And -- but we are -- I mean, our appetite and our strategy has not changed. I mean we will -- and we are still discussing with potential targets if they are -- if they want to discuss with us. But as I say, everything is in slow mode now. But other than that, I mean, our strategy is still intact and the same.

Most of the questions have been answered already, but I was wondering if you could elaborate a bit on the CapEx. I see it increased quite significant in Q1, but do you expect it to decrease in the following quarters?

Yes. The high CapEx here in quarter 1 is mainly a result of these efficiency initiatives that we are now in the process of finalizing. We are -- have been moving our operations from Albion in the U.S. to Mexico. That has required investment in new equipment and sort of leasehold improvements in the Mexico facility. That is the main reason for the, let's say, above-average CapEx. But for the remainder of the year, we expect CapEx to go down as we have, let's say, changed the priority on CapEx that can wait. And therefore, we expect lower levels in the remainder of the year. I don't want to give you a precise guidance at the moment.

It's Wei calling from SEB. I have 2. Firstly, could you add a bit of color on the U.S. operation? Have you seen any early signs of recovery as now they are also talking about easing lockdown?

And then secondly, actually, it's a follow-up question to Niels. So how do you see the change in the market dynamic caused by COVID-19? Just in a longer-term perspective. What are you seeing with these private clinics and for their business? I mean, I guess, now they all have quite a significant cash flow issue, I guess, especially in the U.S. Could you -- what are you seeing right now? And do you think it would be more M&A activities and -- at a better price, let's see, in the longer-term perspective?

Okay, let me take the U.S. We have -- U.S. is probably 2 weeks behind Europe, and we have seen some sign of recovery there. It seemed to be a little bit later than Europe.

On the long-term prospects, we don't see how this will impact the long-term effect of either bracing and support and prosthetic. Bracing and support might be a little bit slower in the uptick because it's more tied to hospital operations. But it's a pure speculation at this point. But the long-term impact on bracing and support and prosthetic, we can't see that this would have any effect on that.

Yes. I mean the M&A, again, it's partly speculative. But as Jón mentioned earlier, I mean, it's our expectation that this is -- this pandemic is -- perhaps will push some further to the consolidation that is already ongoing to some degree. And as we get out on the other side of this one, we have looked at scenarios where there could be more M&A activity. But I think it's too early to say. It's, to some degree, speculative. We just need to see how the next couple of months develop. And as Jón mentioned, our appetite for acquisitions is still the same.

And -- but I would caution you to make the conclusion that there will be a widespread fire sales on the other side of this because there is no sign of a distressed customer, which would be a typical target of ours.

Just a couple of sort of follow-up questions here. Just on your full year guidance, everything is, of course, suspended. But is it fair to at least assume a relatively stable tax rate level in the 23%, 24% level? Or is there anything I'm missing here on that part?

And then you mentioned a bigger impact in bracing and support in April. Not at all surprising, of course. But do you then expect a potential rebound as we go a little bit longer? I'm primarily focusing on -- we have a lot of postponed elective procedures. So do you expect any uptake here, for example, the Unloader sales, where you have a lot of the, for example, knee surgeries being postponed?

And then just lastly, you mentioned the year-over-year decrease in March, but I didn't really catch the number. Was it 50% you said? I think it was Christian asking that question.

15%, 1-5. On the tax rate, again, I'll have to refer back to that we will sort of -- we're not going to give a guidance on that for the full year. But I think your best guess now is our prior view on this. But with that said, I mean, there could be some change because of, let's say, markets are impacted differently by this pandemic. Therefore, taxable profits, let's say, will be impacted -- or the balance will be shifted a little bit. So there could be some change in the effective tax rate sort of short term. But longer term, it is still -- we should -- you should still model 23% to 24% for this year. Yes, I'm not ready to give that guidance, but the best estimate is probably where we -- what we previously indicated.

Yes. On the bigger impact of bracing and support, as I said before, I don't think we should read too much into it. First of all, the difference is very small between bracing and support and prosthetics.

And regarding the bigger Unloader sales, yes, it's very logical to think that a larger time to sort surgeries should lead to more Unloader use. Yes, it's logical to think that way, but we haven't seen it. And it's pure speculation if it does. I don't know. It's -- but yes.

So with the recent depreciation of the Icelandic króna, what kind of effect would that have on your cost base for this year? I'm sure I can do the calculation myself, but I guess that your Icelandic króna cost base will come down this year compared to last year because of your cost savings. So how will that impact your P&L in U.S. dollar terms?

Yes, Niels, our Icelandic cost as a percentage of our total cost is around 11%, 12-ish percent. And the Icelandic króna has depreciated around 20% year-to-date. So currently, we estimate maybe up to a slightly less than a percentage point impact on margin, but sort of approximately. Yes, and let's say, a normalized operating cost. Yes, yes.

Yes. If not, then we wish all of you good luck out there. It's a strange world. And as a final remark, we will be on a virtual road show next week in relation to the quarterly result. Please reach out to our Investor Relations team if you would like to have a call with us and also if you have any questions after the call. And I hope that you and your family are safe, and good luck out there. Thank you for listening, and have a good day.